Weekly Market Review - 20-07-2026

Jul 20
5 min read

UK equities proved resilient over the week, while US markets moved lower as technology stocks led the decline. Renewed fighting between the United States and Iran drove oil prices sharply higher and revived inflation concerns, while UK politics entered a new chapter with Andy Burnham preparing to take office. Looking ahead, markets will focus on UK inflation data and the ECB’s latest interest-rate decision.

Market Recap.

Equity markets delivered a mixed performance over the week, with UK equities moving higher while US markets came under pressure.

The FTSE 100 ETF was the strongest performer, rising 1.00%.

In the United States, the Dow Jones Industrial Average ETF declined 0.56%, while the broader S&P 500 ETF fell 1.51%. Technology stocks recorded the sharpest losses, with the Nasdaq 100 ETF dropping 3.68%.

Overall, the figures point to a notable pullback across US markets, particularly among technology-focused stocks, while UK large-cap equities remained resilient.

News.

Sir Keir Starmer has formally resigned as prime minister after just over two years in Downing Street, telling the country that his “work is done” during his final address.

Andy Burnham is due to be appointed by the King and will become the UK’s seventh prime minister in just over a decade. He is expected to set out a 10-year plan for Britain, focused on stable government, easing cost-of-living pressures, reforming social care and transferring more powers to regional authorities.

Markets will watch the new government’s cabinet appointments and early policy announcements, particularly for details on taxation, public spending and its commitment to existing fiscal rules.

Inflation.

UK inflation is expected to have eased in June, providing an early boost for Andy Burnham’s incoming government as it focuses on cost-of-living pressures. Economists forecast that CPI fell from 2.8% in May to around 2.6%, helped by lower fuel prices and slower services inflation.

The average price of diesel fell by more than 16p per litre during June, the largest monthly decline since RAC records began in 2000. This followed the temporary US–Iran ceasefire, which pushed global oil prices lower.

However, the relief may be short-lived. Ofgem increased the household energy price cap by 13% in July, raising the typical annual bill by £221 to £1,862. Renewed conflict between the US and Iran has also driven oil prices higher again, increasing the risk that transport, energy and food costs rise during the coming months.

Central Banks.

The European Central Bank is expected to leave its key interest rate unchanged at 2.25% when policymakers meet on Thursday.

The ECB raised rates from 2.00% to 2.25% in June, its first increase since 2023, after higher energy costs began feeding into broader price pressures. Eurozone inflation had risen from 1.90% in February to 3.20% in May, before easing to 2.80% in June. It therefore remains above the ECB’s 2.00% target.

Renewed fighting between the United States and Iran has since pushed oil prices higher again. Although no change is expected this week, investors are pricing in at least one further rate increase this year if energy costs continue to affect food, goods and services prices.

Commodities.

Oil prices continued to climb as escalating tensions between the United States and Iran increased concerns over energy supplies and shipping through the Strait of Hormuz. WTI crude rose around 11.5% to approximately $82.50 per barrel, while Brent crude gained around 12.2% to roughly $88.10 per barrel.

Precious metals moved lower as rising oil prices fuelled inflation concerns and expectations that interest rates may remain higher for longer. Gold fell 2.2% to around $4,013 per ounce, while silver declined 6.3% to approximately $56.00 per ounce.

ESG.

The UK is experiencing “historic and unprecedented” changes to its climate, according to the Met Office’s latest State of the UK Climate report.

The report confirmed that 2025 was the warmest year recorded since measurements began in 1884, while 2026 has already brought three heatwaves and 25 days with temperatures above 30°C. Days exceeding 30°C have quadrupled in parts of Greater London, while England and Wales received less than half their average spring rainfall.

These changes are increasing physical climate risks across areas including infrastructure, property, agriculture, water supplies and public health. For businesses and investors, the findings reinforce the importance of assessing exposure to extreme weather and supporting adaptation measures such as resilient buildings, improved water management and stronger energy networks.

Geopolitics.

The fragile US–Iran agreement appears to have broken down further, with President Trump declaring the ceasefire “over” and the United States completing a ninth consecutive night of strikes on Iranian targets.

The latest escalation followed the deaths of three American service members in Jordan and Iraq. Iran has since expanded its retaliation, targeting US-linked sites and infrastructure across Bahrain, Kuwait and Jordan.

The renewed fighting intensified concerns about energy supplies and shipping through the Strait of Hormuz, contributing to a sharp rise in oil prices over the week.

Week Ahead.

United States

The US economic calendar is relatively light this week. The Conference Board’s Leading Economic Index for June is released on Monday 20 July.

Attention then turns to Thursday 23 July, when weekly Initial Jobless Claims and preliminary July Manufacturing and Services PMI figures are published.

The week concludes on Friday 24 July with June New Home Sales. Markets will assess whether higher borrowing costs continue to weigh on housing activity ahead of the Federal Reserve’s policy meeting on 28–29 July.

United Kingdom The UK has a busy week of economic data. The latest labour market figures and June Public Sector Finances are released on Tuesday 21 July.

June CPI and Producer Price Inflation figures follow on Wednesday 22 July, with inflation likely to remain the main focus for markets and the Bank of England.

Preliminary July Manufacturing and Services PMI data are published on Thursday 23 July, followed by June Retail Sales on Friday 24 July.

Eurozone

The European Central Bank’s interest-rate decision will be the main event in the Eurozone this week. The decision and accompanying press conference take place on Thursday 23 July, with markets watching for guidance on inflation, higher energy prices and the possibility of further rate increases.

Preliminary July Manufacturing and Services PMI figures are also released on Thursday, providing an update on economic activity across the region. The ECB’s Survey of Professional Forecasters and Consumer Expectations Survey follow on Friday 24 July.

It is important to note that the geopolitical situation remains highly fluid, and developments are changing rapidly. As such, the outlook may shift quickly as new information emerges.